Wednesday, December 7, 2011

Metallica, forex dealers

Duff McKagan, the former bassist of
Guns N’ Roses, once unwittingly spent $40,000 on expensive suits in Italy
because he didn’trealize how much his purchases—then in Italian lira—were
worth in dollars. The lanky musician now sings a more sober tune: After taking
business courses at Seattle University, he started writing about finance for
Playboy ("Duffonomics") and—most recently—launched a wealth-management
firm for rockers: Meridian Rock Capital Management LP. Millionaire musicians,
the 47-year-old told fans at New York City's Strand bookstore in October, are
an “underserviced” community.

And then, as always, there is Metallica:

After the 2008 global financial crisis, rock bands and their managers are
paying closer attention to obscure concerns like currency rates and economic
trends when inking contracts with foreign concert promoters. Eight months
before Metallica takes the stage in Germany, [manager Cliff] Burnstein decides
whether the band should be paid in dollars, euros or a combination of the two.
If exchange rates swing in a way that hurts Metallica’s earnings, he buys
derivative financial instruments to lock in a preferred rate. Sometimes ticket
prices are hiked to compensate for possible currency-related losses, though Mr.
Burnstein shuns this strategy.

“Nobody is looking to make a
foreign-exchange trade to make money, but you don’t want to be a loser,” the
scraggly bearded manager said.

Speaking of scraggly
bearded comedians, here is Bill Bailey with his version of
Metallica’s “Enter Sandman”: